“We’re going to see who’s treating us fairly, who’s not treating us
fairly,” Trump said at the White House on March 8 while rolling out the
new trade barriers.

Trump signed orders imposing a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. However, he has kept the doors open to negotiations.

“America will remain open to modifying or removing the tariffs for individual nations,” said Trump.

He invited trading partners seeking an alternative to tariffs to negotiate with U.S. Trade Representative Robert Lighthizer....

The countries that export the highest volumes of steel and aluminum
to the United States also happen to be some of its key allies, including
Canada, the European Union (EU), Japan, and South Korea....

By getting tough on tariffs, Trump has created a bargaining chip to
force these allies to knock down their barriers to American goods.

“It’s just the start of unleashing American industry from the unfair
trade practices that have hounded us for years,” Secretary of Commerce
Wilbur Ross told Fox News on March 8.

Behind the scenes, however, EU representatives have been pressing for
exemptions from tariffs, claiming that the bloc is a close ally and
that any import levies are unjustified.

At a weekend rally in Pennsylvania on March 10, Trump took aim at Europe, threatening to extend tariffs to its car industry.

“Open up the barriers and get rid of the tariffs. And if you don’t do
that, we are going to tax Mercedes-Benz, we are going to tax BMW,” he
warned.

Trade and investment flow between the United States and the EU
creates the largest economic relationship in the world. The U.S. goods
trade deficit with the EU was $152.4 billionin 2017, according to the U.S. Census Bureau.

U.S. exporters and investors, however, face barriers to entering or
expanding their businesses in certain sectors of the EU market, stated a report by the Office of the U.S. Trade Representative (USTR).

The EU’s average applied tariff rate is 4.8 percent. The average agricultural tariff is 10.9 percent and the nonagricultural rate is 3.9 percent.
Although the EU imposes a low levy for nonagricultural goods, there are
some high tariffs that affect U.S. exports, such as a10 percent duty
on passenger vehicles and 22 percent on trucks.

On March 12, Trump wrote on Twitter that the United States would hold meetings with EU representatives to address trade issues.

“Secretary of Commerce Wilbur Ross will be speaking with
representatives of the European Union about eliminating the large
Tariffs and Barriers they use against the U.S.A. Not fair to our farmers
and manufacturers,” he wrote.

Similarly, American companies are facing difficulties in accessing
Japan’s automotive market. A number of non-tariff barriers exist that
impede access to the market. As a result, overall sales of American-made
vehicles and automotive parts in Japan remain very weak, according to
the USTR report.

On March 10, Trump wrote on Twitter: “Spoke to Prime Minister Abe of
Japan, who is very enthusiastic about talks with North Korea. Also
discussing opening up Japan to much better trade with the U.S. Currently
have a massive $100 Billion Trade Deficit. Not fair or sustainable. It
will all work out!”

Both Canada and Mexico received a temporary exemption from tariffs on steel and aluminum imports.

Trump signaled that the two allies could make their exemption
permanent by conceding to U.S. demands in the renegotiation of the North
American Free Trade Agreement (NAFTA).

“Due to the unique nature of our relationship with Canada and
Mexico—we’re negotiating, right now, NAFTA—we’re going to hold off the
tariff on those two countries, to see whether or not we’re able to make
the deal on NAFTA,” Trump said at the White House on March 8.

Another factor that could exempt a nation from the tariffs would be
if it were to trim a bilateral trade deficit with the United States,
according to Trump officials. The administration is asking China to come
up with a plan to reduce its massive trade surplus with the United
States.

China is a relatively small exporter of steel and aluminum to the
United States, but it has been on Trump’s radar for a long time. The
United States has its largest trade deficit with China....

Trump wants to cut the trade deficit with China by $100 billion,
which accounts for more than a quarter of last year’s $375 billion trade
deficit for goods.

In addition, the Trump administration may take a tougher stance on
the Chinese regime’s protectionist policies, which could lead to
retaliatory trade measures over intellectual property.

On Aug. 14, Trump signed a memorandum
to tackle China’s trade practices with regard to the theft and forced
transfer of American intellectual property. The memorandum has ordered
Lighthizer to determine whether a formal investigation into China’s
trade policies is needed.

The Chinese regime’s protectionist and trade-distorting policies have weakened the competitiveness of American companies.

Key Democrats Sen. Elizabeth Warren (D-Mass.) and Senate Minority
Leader Chuck Schumer (D-N.Y.), who have been the most prominent critics
of Trump in the Senate, support the president’s efforts to address
China’s unfair trade practices.

“I have been one of the chief critics of status quo on trade,” said Schumer on the Senate floor on March 7.

“The president’s instincts to go after China are correct,” he said. “China is eating our lunch. China is rapacious.”

However, Trump’s proposal to increase tariffs has prompted an outcry within the Republican Party.

Some Republican lawmakers have openly discussed taking legislative
action to claw back Trump’s trade powers. They are concerned that
sweeping tariffs would spark a global trade war.

But talk of a trade war is a false narrative, according to Trump’s top trade adviser, Peter Navarro.

Image caption: "Surrounded by steel and aluminum workers, U.S. President Donald Trump
signs a 'Section 232 Proclamation' on steel imports during a ceremony in
Roosevelt Room at the White House in Washington, on March 8, 2018.
(Chip Somodevilla/Getty Images)"